Tax Treatment of Education Payments

[oneeightone]

Hi All,

Had a question regarding the income tax treatment of education spends.

If I make an education payment to a relative using a credit card (thru one of the online platforms) then would this be treated as income in the hands of the receiver? Would this reflect in their AIS etc?

The amount is approximately 90,000 INR in total.

Thanks!

 

[Vasuki]

Hi All,

Had a question regarding the income tax treatment of education spends.

If I make an education payment to a relative using a credit card (thru one of the online platforms) then would this be treated as income in the hands of the receiver? Would this reflect in their AIS etc?

The amount is approximately 90,000 INR in total.

Thanks!

Even if it shows.
You can claim deduction. As you claim deduction for ppf or insurance .

 

[SSV]

Hi All,

Had a question regarding the income tax treatment of education spends.

If I make an education payment to a relative using a credit card (thru one of the online platforms) then would this be treated as income in the hands of the receiver? Would this reflect in their AIS etc?

The amount is approximately 90,000 INR in total.

Thanks!

You are paying to an educational institution on behalf of your relative right??
Then it’s technically , a loan to your relative..
This item is not categorised into any of the items that’s will be shown in AIS and hence it won’t be displayed in your relative’s AIS
It’s not an income to your relative it’s a loan to your relative given by you

 

[oneeightone]

Even if it shows.
You can claim deduction. As you claim deduction for ppf or insurance .

But deduction can be claim by me right? The one who made the payment. Any idea how it would be for the one who receives..

Don't want my relative to get some tax notice or liability because of me 😂

 

[oneeightone]

You are paying to an educational institution on behalf of your relative right??
Then it’s technically , a loan to your relative..
This item is not categorised into any of the items that’s will be shown in AIS and hence it won’t be displayed in your relative’s AIS
It’s not an income to your relative it’s a loan to your relative given by you

No. So ideally this is a manufactured spend.
Credit card to bank acc.. not sure how the MCCs etc treat it

 

[SSV]

No. So ideally this is a manufactured spend.
Credit card to bank acc.. not sure how the MCCs etc treat it

But deduction can be claim by me right? The one who made the payment. Any idea how it would be for the one who receives..

Don't want my relative to get some tax notice or liability because of me 😂

please elaborate what you are trying to achieve here and by doing what..

 

[oneeightone]

please elaborate what you are trying to achieve here and by doing what..

Trying to make an "education payment" - this is ideally a bill payment from cred / Paytm. Adding the beneficiary as my relative. So basically the payment goes to the relative and he pays me back ... This will help achieve milestones etc

 

[SSV]

Adding the beneficiary as my relative.

then any tax deduction facility will be applicable for the beneficiary .. isn't it??

 

[oneeightone]

then any tax deduction facility will be applicable for the beneficiary .. isn't it??

Yes I'm not sure. I was worried that the transfer will be categorised as income in the hands of my relative and that income would be flagged to the IT department and be taxed accordingly...

 

[SSV]

I was worried that the transfer will be categorised as income in the hands of my relative and that income would be flagged to the IT department and be taxed accordingly...

you are not transferring anything to him.. you are paying his bill.. thats it.. how much amount?
He owes you money later.. and he will repay it the way you want..

 

[sxchzy]

nope
it wont be tax excluded or deductible

 

[prashu]

My annual package is 4LPA and i am not applied for any income tax.
1. Rotating 70 to 80k from credit cards every month.
2. Annual spends in hdfc bank (salary acc ) for last FY in hdfc is 21L
3. Annual spends for kotak (using for daily upi spends) for last FY is 10L.

If my package is 10LPA by next year and i apply for Income tax, does these 3 points will cause any trouble in future ?

 

[Vasuki]

My annual package is 4LPA and i am not applied for any income tax.
1. Rotating 70 to 80k from credit cards every month.
2. Annual spends in hdfc bank (salary acc ) for last FY in hdfc is 21L
3. Annual spends for kotak (using for daily upi spends) for last FY is 10L.

If my package is 10LPA by next year and i apply for Income tax, does these 3 points will cause any trouble in future ?

What makes u rotate 70-80k pm for longer than 3 month ?

 

[prashu]

What makes u rotate 70-80k pm for longer than 3 month ?

I have due payments in different credit cards...

 

[Vasuki]

I have due payments in different credit cards...

Take a loan of amount and Don't rotate that much ..with salary u can get a loan ..
For few month rotation is good ..not for long .
If u want limit increase u should go slow .

If u spend more than 10 L in a year it get reported to AiS of income tax.

U have to justify the money source and its utilisation .
& If there is tax applicable u can pay its not a big deal.. nothing to worry ..

Idk why in this country people are sacred of
Income tax notice
Police man
Railway tickey guy
And stock market 🥸

 

[imdjay]

Income tax notice
Police man
Railway tickey guy
And stock market 🥸

They are unpredictable.
Inki kabhi bhi satak sakti hai.
Baad me bhale hi fir aap sahi ker lo but for the time being you will be ready to do anything to get out of that situation asap.